On wealth inequality and social exclusion

wojtek · Posted on2015-03-242015-04-01

Social science has produced a metric called “relative poverty”, and another, related to this, called “wealth inequality”. The notion that this is a bad thing has turned into a sort of political “Amen”, and has been recently used to belittle the regional economic miracles that are both Singapore, and Israel. Both are often referred to as wealthy… yet unequally so. Reporters at the CBC and NPR tend to lower their voices while mentioning it; undoubtedly a sign of their seriousness and education.

Perhaps it’s time for a refresher on how crazy wealthy we’ve gotten.

Some years ago Russ Roberts over at Cafe Hayek produced this 1975 Sears catalogue, with prices adjusted for average non-managerial labor hours required for their purchase. The comparison with today is staggering — do scan it prior to reading the remainder of this post.

Briefly, we are massively better off now than we were even 30 years ago. So many things have enriched us, including the ability to communicate from our beds with complete strangers. Those who are labelled as “relatively poor” by that ridiculous metric are, despite protestations to the contrary, participating much more in both society, and that of the world at large, than those who are “more equal” in poorer places.

And yet, even this is a shallow interpretation of wealth.

I don’t measure my participation among others within my geographic region by how much nominal income I declare on my tax return. To me, there is nothing more petty than using that as a measure of anything useful as regards my well-being. I am wealthy because I have friends and family. I am wealthy because I am surrounded by abundant food, even in winter. For fractions of an hour of the time of even the most unproductive around me, we can purchase a vast quantity of great food and products that increase our life’s enjoyment to such a degree that I can scarcely remember what life was like for me prior to the abundance of these conveniences.

And still, I know there are others in my country who are very wealthy. Quite a few who are much more wealthy than I can hope to become. Some of them have arrived at this wealth by theft, some by graft, but others, like those who entertain millions, perform vital services, and invent and produce the amazing things that make my life fun, have done so through enriching my existence. I thank them, even though I don’t know them — yet I don’t need to, because I’ve already paid them a pittance compared to what they’ve provided me in return.

All I know intimately are those several dozen people with whom I have social interactions; concerning myself with the relative monetary status of successful strangers seems both silly, and fruitless — even if they are quite numerous on my side of a political boundary. Better to think about ways to enrich the lives of strangers and perhaps I can achieve that which, at present, seems to be so monumentally important to so many people. I won’t care either way about what relative status I’ve attained, but I will care about what I’ve been able to create along the way.

And in case you’re wondering why I start this post off with the Sears catalog — you really should go through the whole thing, it’s quite eye opening — it’s because the insane drop in the time needed to attain many enjoyments has made things only previously permitted to the most affluent, eminently attainable for even the most “relatively poor”. The rich man does not care that lightbulbs cost a pittance; he could always hire a dozen candle snuffers. The rich man doesn’t care that we can gets TVs for less than a day’s worth of work; he could always attend the theatre, or buy a box at a sports venue. Yet, we, in our “relative poverty” can now enjoy, with a little effort, a family barbecue on a grill a 1970s rich man could only have dreamed of; while listening to a music collection he couldn’t have fathomed, and eating food he had to fly across the globe to purchase.